Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps he will take to ensure that insurance companies do not deduct the £10,000 Coronavirus Small Business Grant from insurance payouts relating to holiday booking cancellations; and what discussions he has had with representatives of the Financial Conduct Authority on that matter.

Insurers must treat customers fairly and firms are required to do so under the Financial Conduct Authority’s (FCA) rules. The FCA sets the conduct standard required of insurance firms in relation to their business which aim to ensure customers are treated in a fair manner. For example, the FCA’s rules require insurers to handle claims fairly and promptly; provide reasonable guidance to help a policyholder make a claim, and appropriate information on its progress; not reject a claim unreasonably; and settle claims promptly once settlement terms are agreed.

The Government is aware of the issue that some insurance companies are deducting the Coronavirus Small Business Grant from insurance payouts, on the basis that this would be compensating businesses twice for the same loss. The government is working closely with the FCA on this issue to understand whether this approach is consistent with their conduct rules.

The Government is also in continual dialogue with the insurance sector to understand its response to Covid 19.